SUN Hung Kai Properties is exploring the possibility of issuing mortgage-backed bonds as an additional source for strengthening capital resources. Vice-chairman and managing director Thomas Kwok Ping-kwong said yesterday that the company was discussing the feasibility of securitised mortgage portfolios with financial advisers. Many companies are studying securitisation of mortgage portfolios, which, Mr Kwok said, would boost the development of Hong Kong's capital market. Cheung Kong (Holdings) is understood to be planning an issue of mortgage-backed securities. On the property market, Mr Kwok said residential prices had fallen by about 20 per cent in the past few months and had reached the bottom in the short term. He said the downside for the prices of good quality residential developments would be limited despite short-term worries such as the uptrend of interest rates and the restrictive mortgage lending policies of the banks. ''Long-term positive factors will support the growth of Hong Kong's economy as well as the property market,'' said Mr Kwok. He said positive factors included the de-coupling of China's Most Favoured Nation status from political issues, China's successful control of inflation, improvements in economic growth and the anticipated green light for Hong Kong's new airport development. Despite the recent correction in home prices, Mr Kwok said his company would be able to maintain its earnings growth. He said the group's property sales amounted to about $15 billion for the year to June, compared with $10.3 billion for the previous financial year. But he conceded that the Government's nine-month restriction on the pre-sale of unfinished flats had resulted in delays in the sales schedule of the company's new projects such as the Ho Tung Lau development in Sha Tin. He said the Ho Tung Lau project, comprising 10 blocks, was now expected to launch pre-sales early next year. Originally, pre-sales had been planned to start this year. Mr Kwok said the Government's anti-speculation measures were having an effect in curbing speculation, and developers had done their utmost to co-operate in the fight against spiralling home prices. He said residential prices would continue to grow in line with the medium and long-term demand and supply situation. Mr Kwok said banks would consider relaxing mortgage limits if Hong Kong dollar deposits increased. He also said domestic developers were unlikely to form a united front to bid for two residential sites available for sale at a Government land auction to take place later this month. He said the sizes of the two sites were much smaller than two plots auctioned in May. In the May auction, more than 10 developers, including Sun Hung Kai, teamed up to buy two residential sites, a move which raised a public outcry.